1099R responsibility

Submitted by John Ego on Thu, 2018-02-15 02:30

I recently rolled over my traditional IRA (Company A) into a tax-deferred annuity (Company B). It wasn’t a “direct rollover” but was within the 60-day window. I also replaced the mandatory 20% withholding, within the 60-day window, so the total/original IRA would qualify as a tax free rollover.

To date I’ve received a 1099R, relating to the traditional IRA, which indicates that the total IRA (1) is taxable, and (2) represents an early distribution.

My question is who should I be bothering for a corrected/updated 1099R?



Submitted by Alan - IRA critic on Thu, 2018-02-15 03:03

  • The 1099R is correct as required. You need to report the distribution on line 15a of Form 1040 and indicate next to the line on 15b “rollover”, so that 15b will be 0. The will prevent any taxes on your distribution. Note that you can only do one such 60 day rollover within a 12 month period, so you have a long wait before you can do another one. If you need to move IRA money, the best way is by direct trustee transfer. With a direct transfer you will not get a 1099R and will not have to report it and you can do unlimited transfers.
  • There is no mandatory withholding for an IRA distribution. You can always decline withholding, but if you don’t the automatic rate is 10%. Don’t know how this got to 20%. Are you sure that the first account was an IRA?

Submitted by John Ego on Thu, 2018-02-15 03:52

Was a 401(k). Thanks for the response.

Submitted by Alan - IRA critic on Thu, 2018-02-15 04:21

That produces some changes to my earlier post. Since the distribution was from a 401k, change the Form 1040 line from 15 to 16. Further, since the rollover was from a 401k to an IRA instead of between IRA accounts, it does NOT count as a rollover for purposes of the one rollover per 12 month limitation. 

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